Venezuela’s revamped foreign currency exchange system requires companies operating there to reconsider the exchange rate(s) they use to translate their bolivar-denominated monetary assets and liabilities.

Current IFRS projects

IASB Projects: a pocketbook guide

The IASB continues to move forward with its standard-setting activities and the ability to stay one step ahead in a sea of change is critical. IASB Projects: a pocketbook guide summarises the key features of the various IASB projects, many of which are joint projects with the US FASB as part of ongoing efforts to converge IFRS and US GAAP.

In particular, the pocketbook guide summarises the proposed standards based on the tentative decisions taken to date and sets out some of the potential financial and business implications of the proposed standards, together with EY’s views on the projects.

Joint Project Watch

The standard-setting activities of the IASB and the FASB on their joint projects continue to move forward. The Boards have issued final standards or exposure drafts on several projects and continue to re-deliberate others. Our Joint Project Watch publication is designed to give you a snapshot of key developments from an IFRS perspective, along with our observations about the potential implications for companies.

The IASB and the FASB have issued new requirements for recognising revenue under both IFRS and US GAAP. IFRS 15 Revenue from Contracts with Customers provides a single revenue recognition model based on the transfer of control of a good or service to a customer.

The new revenue standard marks a significant change from current requirements under IFRS. It provides a more structured approach to measuring and recognising revenue, with detailed application guidance. Therefore, adoption may be a significant undertaking for many entities. Early assessment will be key to managing a successful implementation.

The standard is effective in 2017, with early adoption only permitted under IFRS.

The IASB has substantially completed redeliberations on its new leases standard that, when issued, would require lessees to recognise assets and liabilities for most leases. Lessees applying IFRS would have a single recognition and measurement model for all leases (with certain exemptions). Lessors applying IFRS would classify leases using the principle in IAS 17; in essence, lessor accounting would not change. The IASB and the FASB have made different decisions about lease classification and the recognition, measurement and presentation of leases for lessees. In some cases, these differences would result in similar transactions being accounted for differently under IFRS and US GAAP. We expect the Boards to issue the standards in the second half of 2015.

The International Accounting Standards Board (IASB) issued the final version of IFRS 9 Financial Instruments on 24 July 2014. IFRS 9 brings together the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39 Financial Instruments:Recognition and Measurement and is expected to be effective for annual periods beginning on or after 1 January 2018.

Accounting for dynamic risk management, commonly referred to as macro hedging, does not form part of IFRS 9 and is a separate project.

IFRS 9 introduces principles-based requirements for classification and measurement. Also, the IASB has addressed the key concern that arose as a result of the financial crisis that the incurred loss model in IAS 39 contributed to the delayed recognition of credit losses, by issuing the new impairment requirements that are based on a more forward-looking expected credit loss model. The hedge accounting requirements in IFRS 9 were developed with a view to providing better information about the management activities that involve hedging.

The IASB issued IFRS 10 Consolidated Financial Statements in May 2011, establishing a new definition of control that may significantly change which entities are considered to be controlled, and therefore consolidated. The IASB also issued IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities in May 2011. The IASB and FASB are working jointly to consider issues relating to consolidation accounting for qualifying investment entities.

In addition to the priority projects (i.e., revenue recognition, leases, financial instruments, consolidation and joint arrangements, and insurance), the IASB is currently working on other projects. Coverage of those projects is available:

Latest developments

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